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Fashion retailer Truworths posts slight 26-week sales gain

JOHANNESBURG (Reuters) – Clothing retailer Truworths International reported a small increase in half-year sales on Wednesday, reflecting constrained spending in South Africa and Britain despite a boost from the key November-December period.

The South African-listed clothing, shoes, jewellery and homeware retailer said group sales for the 26-week period ended Dec. 29 rose by 1.2% to 10.6 billion rand ($739.4 million) from 10.5 billion rand in the same 2018 period.

Sales for Truworths Africa increased by 2.7%, while like-for-like store retail sales rose by 1%. Retail sales for the group’s UK-based Office chain fell in sterling terms by 3.3% to 151 million pounds ($196.71 million).

“The group continued to experience challenging trading conditions in both its main markets,” it said in a statement.

“Low economic growth, high unemployment, load shedding (power cuts), modest increases in negotiated wages and higher average fuel and utility prices contributed to low consumer confidence and constrained spending in South Africa.”

In Britain, it said Brexit uncertainty combined with continued pressure on store-based retailing continued to negatively impact the economy.

The results come as South African retail sales rose 2.6% year-on-year in November, as Black Friday discounts lured price-sensitive consumers into stores, data showed on Wednesday.

But analysts expect the December figure to reflect the reality of low consumer confidence and low spending, coupled with the impact of recent power cuts.

On Tuesday a survey showed consumer confidence in South Africa remained unchanged in the fourth quarter, after falling to a near two-year low in the previous quarter, as consumers continued to hold off on major spending amid economic uncertainty.

Truworths is the first major retailer to report sales for the holiday season, which is seen as a barometer for the health of South Africa’s consumer spending.

The retailer will release its interim results for the 26-week period ended Dec. 29 on Feb. 19.

($1 = 14.3359 rand)

($1 = 0.7676 pounds)

(Reporting by Nqobile Dludla; editing by David Evans)


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